Can You Be Required to Treat Contract Laborers as W-2 Employees

[Foster_Foster]

Dad is clearly in denial with the "like whatever" but it is what it is. He may or may not care if he has to declare bankruptcy down the road.

You are free, like the other worker, to seek overtime pay like everyone else if you're a non-exempt worker and KY law applies. KY isn't to my knowledge like Florida where he could rely on a bankruptcy trustee not being able to go after his home.

[AJJ]

Okay, I want to give an update on this story and ask a few more things.

At this point I have heard that the Kentucky of labor cabinet is going to have to investigate more and everything. The lady seemed to think everything would go down in January or February. She said I was basically the last person she needed to hear from, the rest had plenty of time to send in their timesheets. ( most guards don't keep their timesheets. ) I was able to give her from Sept 2011 - Nov 21st. She asked him to send all the timesheets in but he has not been cooperative, so she has to get a court subpoena to get all the details ( not that he even has them anymore )

She asked me how much I was paid, and I told her me and a few other guys still made $6.50, surprisingly the guys that are new and not family get $7.00 because he knows he can't walk on them. "shrug" She was surprised and said no company that pays under minimum wage keeps paying it after we get involved, they're too scared. He's crazy.

She told me that she was going to workout a payment plan for her to pay everything back ( minimum wage, overtime, damages, my 5 weeks that went unpaid for, and any other fees. ) She told me she would add the time I did not get paid for in the final bill she gives him. Since she is not being cooperative in sending any information in, she will not work out any payment plan with him and refuses to work with him. She is going to give him a court ordered bill to pay it all upfront.

Which leads me to a few questions, if she does this, and he has no money to pay for it, what will happen? I was told before to keep his finances and the companies finances separate, but I should mention that they are the same thing. He uses the companies money from what I can tell to buy everything. ( groceries, gas, his pill habit ) Plus, as long as I know I can get my money back, I don't really mind what happens to this anymore. At first when I came on here I was saddened to lose my job and did not know what to do, but I have learned things in the last few months that have opened my eyes and now I am just watching as this roller coaster plays out. He still thinks we're okay, but he understands that the Cabinet is pressuring hard on the company.

So my basic questions are, when he gets the bill from court, and it's going to obviously be over 100k, what are the options at that point in time? Can the law take any of his personal stuff, or can the company file bankruptcy to avoid anything from happening and screwing the men out of thousands of dollars? What can happen here and what are the most possible outcomes? Also, is there any possible way of me taking over the company and keeping the job contracts that we have and make it legal? I'd love to do that and be able to keep the guys working and treating them fairly for once. Thanks for all the help, please help describe me what are the possible situations and outcomes, as I am kind of confused.

[llworking]

This was not the news I wanted to hear. I will have to wait to see what the final decision is. But from the looks of it I am out of a job. I really loved this job. but there are more things ahead for me, I guess I can get into real estate and maybe buy a duplex/triplex or something and move out of here.

But hey, jk and cbg, I want to thank you both for your time! you both have been more than helpful! Thanks again and I really do appreciate it. You guys rock. I joined this forum a few years ago, and glad I did. I remember you from before jk, you helped me last time too.

I will give you a little bit more of an example of what an IC is. An IC provides temporary services for a customer. Within certain deadlines for completing the project the IC shows up when the IC chooses to do so, and leaves when the IC chooses to do so. The IC wears whatever the IC considers to be appropriate for the work in question. The IC provides ALL of his/her materials, supplies and equipment. The IC is not required to do the work themselves, the IC may hire employees to do the work or may contract with another IC to do certain segments of a job. An IC works for many different companies or individuals within a year's time unless the IC has taken on a very large, long term project.

I am pretty sure that your dad's people are not IC's...so not only does your father have the problem of misclassifying workers, but he also has the problem that he has been paying less than federal minimum wage per hour. He doesn't have to pay his people 50.00 an hour, but he does need to pay them at least minimum wage, time and a half for more than 40 hours per week, pay employer taxes, and worker's comp. etc. That means that your father needs to charge his customers more than he is charging.

The IRS does have an amnesty program in place to assist employers in complying with the law. More information is available here:

http://perlmanandperlman.com/blog/in...ified-workers/

[AJJ]

Yeah, but he will not cooperate with the cabinet, there is no use. Plus he owes me a good 2.5k alone not including minimum wage and overtime. He refused to pay me so he could buy himself pills. That being said, I know he won't cooperate and he won't call the labor cabinet back after many attempts of trying to get a hold of him. So my questions above still stand.

Thanks for the link though, I didn't know they had a program like that. And a question on that, so he won't owe anything from 2005-2011, just for 2012? thanks.

Edit: I should add in here, I have no hope for him saving the company, I don't want him to at this point. He has cussed me out way too many times for me asking for my money back. He has caused me and my wife to fight way too much, then tells me to tell my "F****** wife to stay out of his business, who do you think pays your bills at your house I DO I AM THE BEST" when he is the one that stole the money from me He has been no help to me and has even threatened me. Right now I just want my money back, and a way to be able to keep these jobs for the good men we have working. I don't care about him, nor the way he treats me, nor do I care about his addictions any longer.

[llworking]

Yeah, but he will not cooperate with the cabinet, there is no use. Plus he owes me a good 2.5k alone not including minimum wage and overtime. He refused to pay me so he could buy himself pills. That being said, I know he won't cooperate and he won't call the labor cabinet back after many attempts of trying to get a hold of him. So my questions above still stand.

Thanks for the link though, I didn't know they had a program like that. And a question on that, so he won't owe anything from 2005-2011, just for 2012? thanks.

Edit: I should add in here, I have no hope for him saving the company, I don't want him to at this point. He has cussed me out way too many times for me asking for my money back. He has caused me and my wife to fight way too much, then tells me to tell my "F****** wife to stay out of his business, who do you think pays your bills at your house I DO I AM THE BEST" when he is the one that stole the money from me He has been no help to me and has even threatened me. Right now I just want my money back, and a way to be able to keep these jobs for the good men we have working. I don't care about him, nor the way he treats me, nor do I care about his addictions any longer.

Well, you could certainly attempt to start a business of your own doing something similar to what your father was doing. Of course, you would have to do it right from the get go, which means that you would have to treat your workers as employees and would have to charge appropriate prices to cover your costs and needed profit.

[AJJ]

Any idea how to go about opening a business like this? and who is to say they'd even keep the contracts we have now?

Also does anyone have an answer to any of the previously asked questions?

[llworking]

Any idea how to go about opening a business like this? and who is to say they'd even keep the contracts we have now?

Also does anyone have an answer to any of the previously asked questions?

Try this link...there is a big button on it that says "start a business today".

Most likely you would be able to get some of your father's prior customers to sign a new contract with your company...but you will also have to get out there and "sell" your company as well.

[Bubba Jimmy]

I do not want to stir the pot, but I do want to add some additional perspective. Not only has the company been underpaying its employees, but it has also not been withholding taxes for social security and medicare from the employee's paychecks, nor has it been matching those amounts and sending the money to the IRS. Further, it has not been paying into the state unemployment tax and it has not been providing the workers with worker's compensation insurance in the event somebody got hurt on the job. These are all problems, and if the IRS were to get involved they could be very expensive problems. If the state determines these people to be employees, they will not simply have you pay them the amount owed for minimum wage and OT. They will also want their unemployment taxes. As you can see, it is more complicated running a business than it first appears.

If it helps any, I had a father who was pretty much a carbon copy of how your father sounds. Do youself a favor and get yourself free. But do things the right way. Get good advice. Learn.

[AJJ]

I'm trying. I am thinking of contacting H&R block to cover myself and pay any taxes I owe. I am trying to do things the right way and make sure everything stays legal on my end. I just want what is owed to me back.

I know this case is kind of unique but any other information is always appreciated.

Thanks to everyone who has responded.

[Bubba Jimmy]

The name over the door is not that important. There are good competent people in all tax offices and there are also bozos. Make sure that you get advice from an Enrolled Agent, if possible. Ask for one. When you go to a retail tax office you don't know if you're getting an experienced knowlegable person or a second-year tax preparer who likes to give intelligent-sounding answers to questions they don't understand (and don't know they don't understand in many cases).